Patreonomics: The numbers just aren't adding up

On paper, Patreon sounded like a dream come true for content creators. In a time where artists have all but given up on educating people about what piracy does to someone's livelihood, Patreon's mission statement "helping creators get paid," sure is inspiring. In fact, Patreon's site description in search results claims "best way for artists and creators to get sustainable income." Even more than this, according to an interview with The Verge, back in August of this year, "Patreon is aiming for something far more ambitious: 'We want to fund the creative class,' CEO and co-founder Jack Conte tells me. 'Ten years from now, we want kids growing up and graduating college and high school to know that being a professional creator is possible. We’re shooting for this cultural sea change.'”
Conte, was one half of Hyundai's favorite band Pomplamoose so he knows a thing or two about getting paid for his work.

Ironically, Patreon was started as a result of being disillusioned with YouTube according to an article in The Outline. "When Jack Conte, a former YouTube musician, and Sam Yam, a co-founder of the mobile ad platform AdWhirl, launched Patreon in 2013, Conte posted a video he had made for an original song called 'Pedals.' The video cost him $10,000 and three months to make and got nearly 2 million views, he said, but he made just $963 through YouTube’s ad network.'This devaluing of art and creators is happening at a global scale,” Conte wrote in a blog post on Patreon. “It actually makes my heart sink when I think of the magnitude of the web’s systemic abuse of creative people.'”
As I wrote back in April, it's only gotten worse for the small content creators over at YouTube.
Despite the lofty promises however, reality doesn't match up with the lofty words.
The Outline article purports that not only is Patreon not the best way for the artists and creators to get sustainable income, it's not even a good way to earn much above the poverty level. Just two percent of Patreon creators earn more than the federal minimum wage through the site. The article, written by Brent

Knepper, who is a photographer, described his experiences on Patreon. Earning $120 during the first month thanks to twenty-four friends who signed up, he was filled with great hopes. Knepper discovered the challenges of making a living off patronage via the site came with what some would call insurmountable challenges.
Despite Patreon's effusive blog posts claiming users are doubling their income every year, this is simply not true for the vast majority of them.
Perhaps the biggest struggle besides making sustainable income from the site is the fact that as Knepper discovered, you spend more time hustling and marketing than you do creating, and Patreon doesn't help in any of those areas. After one year, his monthly income from Patreon went from $120 to $163, or $1956 yearly. That's not enough to cover one month's rent in Silicon Valley let alone anything approaching doubling income.

And while Knepper wonders at one point if he's the problem (as in perhaps not good enough or perhaps not right for the platform) one does have to wonder why so many creators on the site aren't doing well. It can't be that everyone is mediocre. Or at least, not naturally mediocre. What is more likely the issue is that the digital era which ushered in the age of DIY came with a consequence: namely, when it comes to doing it yourself that means doing everything yourself, to the point where you have no time to focus on what you love the most, which is creating something.
As Knepper writes about illustrator Derrick Tarrance, ..."between raising a family and having a full time job, Tarrance was discouraged by how he rushed through making art to meet the weekly deadlines of his Patreon. 'It often had me stressed, instead of inspired, because I continued to feel like this isn't enough.' When he ended his Patreon in May 2017, it had nine supporters, and he made just $59 a month."

Perhaps doing everything yourself is actually not a good thing. It certainly doesn't help to know that while tens of thousands are scrambling for crumbs, Patreon has raised 107 million in VC funding. This month they suffered a blow back when they tried to what I can only describe as cheerfully increase the fees for patrons who support the creators. Their claim was that creators would now take home 95%, i.e. more money. Both creators and patrons alike took issue with this. As Knepper describes it correctly "The fee change comes at a cost to the site’s patrons, and indirectly to its creators, who will get a higher percentage of donations but of a smaller dollar amount. Patreon is making up the lost 5 percent fee on creators by charging patrons an additional 2.9 percent + $.35 for each transaction. This means smaller donors will be hit the hardest." The response was overwhelmingly negative, so much so that Patreon had to apologize and assure everyone they weren't going to change their pricing structure after all.

Creators and Patrons,

We’ve heard you loud and clear. We’re not going to rollout the changes to our payments system that we announced last week. We still have to fix the problems that those changes addressed, but we’re going to fix them in a different way, and we’re going to work with you to come up with the specifics, as we should have done the first time around. Many of you lost patrons, and you lost income. No apology will make up for that, but nevertheless, I’m sorry. It is our core belief that you should own the relationships with your fans. These are your businesses, and they are your fans.

I’ve spent hours and hours on the phone with creators, and so has the Patreon team. Your feedback has been crystal clear:

The new payments system disproportionately impacted $1 – $2 patrons. We have to build a better system for them.
Aggregation is highly-valued, and we underestimated that.
Fundamentally, creators should own the business decisions with their fans, not Patreon. We overstepped our bounds and injected ourselves into that relationship, against our core belief as a business.
We recognize that we need to be better at involving you more deeply and earlier in these kinds of decisions and product changes. Additionally, we need to give you a more flexible product and platform to allow you to own the way you run your memberships.

I know it will take a long time for us to earn back your trust. But we are utterly devoted to your success and to getting you sustainable, reliable income for being a creator. We will work harder than ever to build you tools, functionality, and income, and our team won’t rest until Patreon is making that happen.

In this apology they're all but admitting the smaller content creators are getting shafted already. So strip away the over-promise and focus on the fact it's another Silicon Valley company trying to figure out the best way to line its own pockets. Perhaps if they weren't dependent upon VC funding (and announcing how many millions they've procured for PR value) this might work. But we all know every company has the same exit strategy: prove you're profitable until Alphabet/Amazon buys you.

It's already crystal clear that being internet famous doesn't pay. But what happens when the people leave YouTube out of frustration in order to build something new aren't much better? Sites like YouTube and Patreon claim to be a solution to the "old way of doing things." What they really are is a new problem. Both sites operate the same in that it is you doing all the work. You are the one doing the marketing, hustling, sharing on social, keeping up with fans, policing people who are stealing your work, which make no mistake is rampant and a problem you deal with yourself. Wearing this many hats means you're left with very little time to create for an ever-hungry audience demanding more content. Which then causes the quality of your content to drop. It's a vicious circle. And this is all for companies who skim five percent off the top without investing anything in the creator while raising hundreds of millions from their own Patrons. Ironic, no? Tell me again how this is a good thing?
More and more we keep advocating that if you have to do all the work, you're better off building your own platform and hosting your own videos, especially if you have to build your audience from the ground up anyway.

Five years ago I wrote that the same free culture movement that was destroying music, photography, literature and art was having negative effects on advertising, too. Now this patronage monster that has spring forth in the forms of IndieGoGo, KickStarter and Patreon claim to be the answer to the very real issue. And they just might be--for the 2%. But until the other 98% can pay the rent and put food on the table with these sites, I'm not going to hold my breath.

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MIssADvertising's picture

I've been waiting for this, the emperor has no clothes.

LAPensFan's picture

You're wrong. We started with our own subscription-based platform and ended up having to move to Patreon. A lot of it is trust. People aren't comfortable putting their credit cards/Paypal into a website that doesn't appear to be owned by a massive corporation. Patreon hasn't helped much, either. Really what it comes down to is how big is your social media footprint. If you don't have at least 100K followers total across social media you have no chance. Patreon won't promote creators until they're making tons of money and then they just make more. They lack the motivation to promote creators who have a great idea or create great content, but haven't been discovered/blown up. It's really just another Internet scam where the rich get richer and the poor get fleeced.